Riyadh – Mubasher: Scientific & Medical Equipment House Company has issued a supplementary announcement regarding its upcoming Extraordinary Assembly Meeting (EGM), scheduled for 27 July 2026.
The update provides shareholders with comprehensive documentation concerning proposed amendments to the Audit Committee’s internal bylaws.
A key highlight of the proposal is a shift in the committee’s compensation framework, moving from fixed annual fees to a flexible system aligned with the company’s broader remuneration policies for board members and executive management.
The disclosure serves as an addendum to the company’s previous announcement dated 5 July 2026. Scientific and Medical Equipment House has now made available the supporting documents for Item 10 of the assembly’s agenda, which details the fourth version of the Audit Committee’s working regulations.
A primary focus of the proposed changes involves Article 4, which governs committee membership, composition, and remuneration. Under the current regulations, committee members receive fixed annual fees: SAR 80,000 for the Chairman, SAR 60,000 for members, and SAR 42,000 for the Secretary, alongside a per-meeting attendance fee of SAR 1,500.
The proposed amendment seeks to abolish these specific fixed amounts. Instead, compensation will be determined and disbursed in accordance with the "Remuneration Policy for Board Members, Sub-committees, and Executive Management," as approved by the General Assembly and based on recommendations from the Nomination and Remuneration Committee.
Furthermore, the revised bylaws remove the specific requirement for the Board of Directors' report to include disclosures on compensation paid to committee members, suggesting a streamlined reporting process under the new unified policy. However, provisions for travel expenses—including business class airfare, accommodation, and transportation for members residing outside Riyadh—remain intact.
The updated regulations also reinforce the committee’s independence and operational standards. The committee must consist of three to five members, including at least one independent member, and is prohibited from including any executive board members.
The Chairman of the Audit Committee must be an independent member. To ensure professional distance, the bylaws stipulate that no individual who has worked in the company’s executive or financial management, or for the company’s external auditors within the last two years, is eligible for membership.
Beyond compensation, the document clarifies the committee’s extensive oversight responsibilities. These include monitoring the integrity of financial statements, overseeing internal control systems, and managing the relationship with external auditors.
The committee is tasked with reviewing interim and annual financial results before they are presented to the board, ensuring compliance with international and local accounting standards. It also holds the authority to recommend the appointment or dismissal of the external auditor and the head of the internal audit department.
The proposed bylaws also address potential conflicts between the Audit Committee and the Board of Directors.
Should the board reject a committee recommendation regarding the external auditor or internal audit appointments, the board's annual report must explicitly include the committee’s recommendation and the justifications for the board's decision to override it.
